Assess whether pricing disparities are justified by legitimate factors

SITUATION HMDA data-quality manager in a credit union rolling out a special-purpose credit program has one working extract — appraisal-gap outcomes in majority-minority tracts — after a HMDA resubmission that still fails quality edits. If appraisal-gap outcomes in majority-minority tracts cannot support pricing disparities are justified, the only defensible Fair Lending output is hold.

DECISION HMDA data-quality manager in a credit union rolling out a special-purpose credit program must choose Remove access or reverse the item / Temporary compensating control / Approve a documented exception / Hold using appraisal-gap outcomes in majority-minority tracts after a HMDA resubmission that still fails quality edits.

HYPOTHESES TO TEST 1. HMDA data-quality manager can defend Remove access or reverse the item from appraisal-gap outcomes in majority-minority tracts after a HMDA resubmission that still fails quality edits in a Fair Lending challenge. 2. HMDA data-quality manager cannot defend Remove access or reverse the item from appraisal-gap outcomes in majority-minority tracts; Temporary compensating control is what the extract actually supports after a HMDA resubmission that still fails quality edits. 3. A HMDA resubmission that still fails quality edits never reached the population in appraisal-gap outcomes in majority-minority tracts — reopen intake, do not close pricing disparities are justified. 4. Two facts in appraisal-gap outcomes in majority-minority tracts after a HMDA resubmission that still fails quality edits conflict for HMDA data-quality manager; hold this CRA and Special-Purpose Programs file.

ANALYSIS REQUIRED 1. Flag any disparate-impact table HMDA data-quality manager cannot explain from appraisal-gap outcomes in majority-minority tracts. 2. Test a documented exception versus a pattern a credit union rolling out a special-purpose credit program must defend. 3. Match the adverse-action language to the facts in appraisal-gap outcomes in majority-minority tracts. 4. For this Fair Lending CRA and Special-Purpose Programs file, read appraisal-gap outcomes in majority-minority tracts against a HMDA resubmission that still fails quality edits and write the one fact that would move pricing disparities are justified for HMDA data-quality manager.

RECOMMENDATION Choose Remove access or reverse the item / Temporary compensating control / Approve a documented exception / Hold on this Fair Lending / CRA and Special-Purpose Programs packet (appraisal-gap outcomes in majority-minority tracts after a HMDA resubmission that still fails quality edits). If appraisal-gap outcomes in majority-minority tracts cannot force a Fair Lending label under CRA and Special-Purpose Programs, stop. If appraisal-gap outcomes in majority-minority tracts after a HMDA resubmission that still fails quality edits cannot support Remove access or reverse the item versus Temporary compensating control on this Fair Lending CRA and Special-Purpose Programs close, HMDA data-quality manager must do not infer a control or scheme beyond the transaction and entitlement evidence.